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Govt revenue from telecom sector decreased due to increasing competition

Government's revenue generation from the telecom sector has fallen considerably following the launch of Reliance Jio and due to consolidation and tariff wars among telcos, data from a Lok Sabha reply suggests. A telecom company in India pays license Fee and Spectrum Usage Charges (SUC) as a percentage of its gross revenues. License fee collection from telcos during Q3-FY17 stood at Rs 3450.13 crore, which is down 15% when compared to Q1 FY17. SUC charges collected from telcos have also fallen 22% in Q3 when compared to Q1. Currently, the DoT collects 8% of a telco’s gross revenue as ‘license fee’, this percentage could vary between 5-8% on the basis of each circle a telco operates in. However, SUC charges are fixed at flat 3% of a telco’s gross revenue. Note that earlier Reliance Jio had earlier opposed fixing a flat SUC charge of 3%, stating that this might lead to smaller players shelling out more usage charges when compared to established players. The top three operators in the country, namely Airtel, Idea and Vodafone have also reported a significant drop in their revenues. This subsequently leads to a lower amount of license fee and SUC collection. Airtel reported a 5% QoQ drop in overall revenues in Q3 FY17. Vodafone’s revenue dropped 3% QoQ, and Idea’s revenue was down 6.8% QoQ in the same quarter Who paid the most? Data taken from Communication Minister Manoj Sinha’s reply shows that  Airtel was the highest payer in terms of both SUC charges…

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